After a long period in the doldrums, the economy is finally on the mend - but there's a long way to go to make up lost ground, says the director of CBI Wales

Almost seven years on from the collapse of Northern Rock, the effects of the financial crisis are still affecting the daily lives of people throughout the UK.

There has been a squeeze on living standards across the board and that is going to take years to reverse.

But some have been hit harder than others. And many of those same people find life tough in the jobs market even in better times. We need to change that.

The CBI is looking at how to tackle these challenges in our labour market. A recent CBI report, making Britain work for everyone is the start of that work. A beginning to the conversation.

And over the coming months the CBI will be drawing together ideas designed to improve prospects for people to progress, achieve better pay and improve their living standards.

After a long period in the doldrums, the UK economy is finally on the path back to more robust growth. Employment is growing strongly and 2014 should see pay starting to rise faster than prices.

But there is a long way to go to make up all the ground we’ve lost.

Most workers are still worse off than they were before the recession and they’re looking to business to restore their standard of living.

For many, this will come in time as the economy grows.

The UK has a good record on job creation and raising real pay for the average employee.

In the same way that the UK’s flexible approach to working saved jobs in the recession, it will create new jobs and pay growth in the recovery. It will take time for this to happen, so we must adopt policies to accelerate it where we can.

But our flexible labour market is not enough on its own.

There are two areas where we believe further action is needed: higher productivity and improved opportunity.

The CBI will be undertaking further work over the summer in these areas to develop our ideas.

We know getting into work is the first crucial step in improving living standards.

Most young people don’t have much work experience.

That is understandable, but it does make getting into work more difficult, so the unemployment rate for this group is almost three times as high as the average.

This is a serious problem as research shows that unemployment in youth can scar prospects throughout working life, not just at the time. While the employment rate for women is higher than ever before, it is still below the rate for men.

There may well be an element of choice in this but even in these cases it is likely that many women who want to work may feel unable to do so due to the limited employment choices that match their need for flexibility.

But getting a job is just the start. Moving up from the entry-level floor of the labour market is the best way for individuals to protect their employment in tougher economic times and boost their incomes.

The type of job someone holds has a big impact on the chances of being employed in a year’s time.

Having a permanent rather than a temporary job is the biggest single factor. Ensuring that temporary workers can progress and grow their skills is key to securing progression.

Beyond the form of employment contract, there are a range of other factors shaping how successful someone is in holding down steady work.

Those most likely to remain employed over the course of a year have higher-level skills, are in their early forties, and have full-time jobs paying median hourly earnings.

The issue is less clear cut when it comes to gender but our analysis highlights the importance of putting in place support systems that mean women don’t have to trade pay for flexibility on hours for example, and that flexible working can open the way to more senior positions.

However, in the UK, our overall productivity performance is remarkably poor by comparison to both pre-recession and international standards. It is as yet unclear how much of this weakness reflects structural rather than cyclical issues.

But boosting productivity – generally and in key sectors where it would help disadvantaged groups – is the first key to making progress in raising living standards.

Over the coming months we will explore the UK’s productivity challenge. Our research will focus on four factors.

First, skills. Given skills are key to securing employment, we will look at how businesses can support workers in improving their skills at all stages of their careers.

Second, career progression. This means opportunities for progress towards higher-skilled and higher-paid work. Clear career pathways and individualised support are key to this.

Next, diversity. Our data shows there is a long way for business and government to go on this agenda. Our work will address what more we can do. Too many groups of people are not able to make the contribution that they might.

Finally, the reach different opportunities have across different places, sectors and networks. How do we ensure that where someone lives does not restrict the opportunities they have? What can we do to enhance inclusion and progression in different sectors? How can we ensure that good ideas spread across the country?

In the spirit of this work, the CBI wants to engage in an inclusive analysis of what we can do together as a nation.

We would welcome reactions from all parts of society as we aim for a labour market full of opportunity.

WalesOnline is part of Media Wales, publisher of the Western Mail, South Wales Echo, Wales on Sunday and the seven Celtic weekly titles, offering you unique access to our audience across Wales online and in print.